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Tuesday, March 31, 2009

CFO Gideon Yu Out At FacebookAs Originally Posted at the Wall Street Journal

Facebook Inc.'s chief financial officer, Gideon Yu, is leaving the Internet company, which has begun a search for his replacement, said a person familiar with the matter.

Mr. Yu, who joined Facebook in 2007, was previously the chief financial officer of YouTube, now a Google Inc. unit. He couldn't immediately be reached for comment.

Mr. Yu is the latest in a string of executives to depart the five-year-old company, whose employees and investors remain anxious about when and whether it will go public. Facebook is looking for a CFO with "public company experience," the person familiar with the matter said.

The departure of the 37-year-old Mr. Yu and the ensuing search for a replacement are likely to renew speculation that Facebook, which has previously said it hopes to go public within the next few years, is stepping up plans to do so despite the rocky economy.

The person familiar with the matter said Facebook's financials are strong and that the company expects revenue growth of at least 70% in 2009 compared with 2008 revenue--far above the estimates of some outside analysts.

This person declined to say how much revenue Facebook is making, but added that the company has had positive earnings before interest, taxes, depreciation and amortization, or EBITDA, for the past five quarters and expects to be cash-flow positive in 2010.

The numbers suggest that Facebook's rapid climb to roughly 200 million users hasn't taken the toll some investors and analysts had been speculating about, and that interest in its online-advertising products is growing. But whether the company can grow fast enough to justify its high valuation, remain unclear.

Mr. Yu was an executive at Yahoo Inc. before joining YouTube, which he helped sell to Google. After Google bought YouTube, he accepted an offer to join the venture-capital firm of Sequoia Capital before landing at Facebook.

Mr. Yu helped seal a major round of investment for the company in late 2007. At that time, Microsoft Corp. bought a preferred 1.6% stake in for $240 million, valuing the startup at $15 billion. Other investors with different terms bought in that round at a lower valuation, however, according to investors.

Since the collapse of the economy last year, Mr. Yu's job has grown more difficult, as Facebook has struggled to raise money at even lower valuations.

In December, Facebook postponed a program to allow employees to sell some of their shares after the company struggled to raise money at around a $4 billion company valuation, according to people familiar with the plan. At the time, the company cited the "incredibly difficult" global economy.

Monday, March 30, 2009

Google announced Thursday that it is trimming just under 200 positions from its sales and marketing operations, or about 1 percent of its global work force.

"Google has grown very quickly in a very short period of time," sales chief Omid Kordestani wrote in an unusually candid post on the company's official blog. "When companies grow that quickly it's almost impossible to get everything right — and we certainly didn't."

The layoffs represent the latest round of cuts at the Mountain View Internet powerhouse. As the economy has slowed, Google has throttled back on expenses.

In January, Google cut its recruiting department by about 100 positions. In February, about 40 Googlers were let go when the company stopped selling audio ads. Google has also laid off more than a thousand contractors.

The company has 20,222 employees.

In a research note published Thursday, Jim Friedland, an analyst at Cowen and Co., said advertisers at a recent conference in New York said advertising budgets for paid search — Google's bread and butter — were either down or flat in the first quarter.

Rob Sanderson, an analyst with Broadpoint AmTech, downgraded Google last week to neutral, citing a slowdown in "monetization," in other words, advertising sales.

"We still like Google longer term and will return to the stock," Sanderson wrote. But he added that in the near term, expectations for Google's growth this year were too high.

In his blog post, Kordestani said he was laying off salespeople because the company had over-invested in preparation for growth that has petered out in some areas.

The Latest On Microsoft And Live SearchInterview With Steve BallmerOriginally Posted at All Things Digital

The Microsoft (MSFT) boss is sitting down with BusinessWeek editor Stephen Adler at the McGraw-Hill media conference. Expect at least some chatter about Yahoo (YHOO) and its new boss Carol Bartz, who just happens to be visiting New York this week as well.

Following is paraphrased live notes, unless in quotes. Please refresh your browser for updates.

Starting off with an economy question: Should be believe that recent rally means things are getting better?

SB: The principle we’re operating on is that the economy will contract, reset… and we’ll begin again what I call “regular growth”. We had had abnormal growth fueled by too much debt in the system. I don’t how long that will take. It could take, two, three, four years to get there.

SA: Back to MSFT business. Why don’t you dominate search?

SB: We had to start essentially from scratch about 6 years ago. Essential thesis: Most of the innovation is still come in search. Search hasn’t changed much in the last 5 years, 10 years. “It’s gotten somewhat better, but at the end of the day you search to do something, you don’t search to find links to web pages.” We think there’s a lot of innovation yet to come. We’ve learned that cost of just getting into the game - the table stakes - is a lot higher than we realized in R&D, capex. Google (GOOG) is making that investment, Yahoo can’t, we are.

SA: Isn’t much of this a marketing question, that no one visits you for search?

SB: Yes. But it means opportunity for us. Our brand will differentiate us, and if we can just get 15 or 20% in the next few years, that’s a big step up.

SA: Please tell us about Kumo, your new search product.

SB: Not really ready to talk about it. Need a new name. We update search every 9 months. Going still call it “Live Search” for now.

SA: So not a new product, just an incremental release?

SB: “I think we could use a “set change” as they say in organizational behavior classes, and when we’re ready to release one, we will”.

SA: What’s up with Yahoo talks?

SB: Principles first: “Whether or not there’s a partnership to be had with Yahoo, we think our own innovation… it’s not about Yahoo’s technology. It’s really about getting the pooled volume, because you actually can improve your product faster if you have more users.” If you have more advertisers, you can improve the product as well. “There are returns to scale. And putting the scale together is valuable.”

“With that as context, we’re largely on the same strategy, with or without a partnership with Yahoo.” I’ve talked with Carol briefly, over the phone. “I’m sure when it’s appropriate, we’ll have a chance to sit down and talk.” I’ve known her for years. She’s straightforward and friendly “and when she’s ready, we’ll have that type of discussion. Whether a deal gets done or not, who knows.” People at our two companies talk all the time.

SA: Will there be a deal?

SB: “There are a lot of things that are fairly compelling economically in trying to put our two search efforts together in a partnership.” I thought that last year, and “I got bailed out of this economy by Yahoo on that”. [Laughs].

SA: Do you own an Apple (AAPL) products?

SB: “No. I don’t. My sons don’t. My wife doesn’t.”

SA: Why does MSFT, which is so smart have so much trouble outside of Windows, Office. Why so difficult to expand beyond that (ie against the likes of Apple?).

SB: “Most people in our industry never expand beyond one thing.” So the fact that we have Windows, Office, business software…”So beyond those three, Mrs. Lincoln, or whatever, how was the play? I think I got that backward, but you get the point.”

Xbox doing great for us. Incredible asset, opportunity. We have areas where we have our work cut out for us. No doubt that Apple does a nice job in video and music services. We’ve talked about search… but if you were a shareholder, I’d also say, it’s great because there’s lot of opportunity.

SA: Whither Zune?

SB: “We’re going to keep going with Zune”. It’s two things: Service and a device. The Zune service, that’s going to fan out its footprint. Hardware will continue to improve. “The question is whether even if we flog them heavily, is their profit upside”. We’re going to keep going “I won’t say full steam ahead, because that implies acceleration of investment, but we’re going to sustain our investment.” We like it and the future may be the software/ecosystem on other devices.

On to smartphone market:

SB: Smartphones will go from 10% to 70 or 80% of market next few years. So what will people want? Good experience built in, w/out downloading stuff. You want good price range. iPhone is very expensive phone, without a keyboard. Some people can’t afford them. Sweet spot is phones that cost $150 to $200 to make — forget retail price. iPhone is about $500. We want to provide vendors with ability to make Windows phones up and down the price scale.

Unless you assume Apple and BlackBerry are going to sell the lion’s share of most phones, which I don’t, I think the play for us is to provide broad innovation at many price points.

A $500 phone is not going to work for everybody in every market. The most popular phones in China and India cost about $25 to build. We can’t get our software on that.

SA: Do you care about “touch” on phones? The blogs say you are.

SB: Windows Mobile 6.5 has touch on it. The way Apple does touch drives cost. They way they do it on the iPhone is not an inexpensive component. We’ll do it in a way that you can afford to do it on most phones.

SA: What are you thinking with these retail stores? How different than Apple?

SB: You have an interesting case in the US. Right now there’s a range in innovation, around, by our partners. Not selling software in stores, but hardware. It is a challenge today for our partners, who do the most innovative designs, to get them to market. Because it’s too high risk for the Best Buys of the world. So we need an outlet to champion that innovation. Showcase devices that are hard to get stocked in traditional electronics retailer.

Apple actually sells about half of all Apple machines through its stores or online. We’re not going to do that for PCs. But we don’t to show off interesting stuff. It’s sort of like our enterprise consulting services, which doesn’t really compete with the big consultants. It’s a place to showcase.

SA: Back to Windows/Office. How are you adapting the Cloud - Software as Service?

SB: I think we’re doing a good job. Rattles off series of vaguely cloud-related services - things that involve the Web. “We’re doing a lot of work in the area and I see all upside from the cloud.” Do we have competitors? Sure. Is Google going to compete with us? Sure. We try to compete with them, too. Everybody makes their software really run on the client. The truth of the matter is that nothing is really a Web software — even Google Apps. Everything really runs on the local device, because it runs better there.

SA: What do you think of IBM/Sun deal?

SB: “I don’t exactly get it, but it doesn’t exactly surprise me either.” Logical exit strategy for Sun shareholders. On IBM’s side. “I think you pick up a lot of stuff when you buy Sun” and you have to figure out if you want everything you’re going to get. “It doesn’t change our fundamental” economics, strategy. “I think it gives me a year or two where they’re digesting it. I relish that year.”

SA: Recently you promised to keep investing in R&D, etc and you got criticism for that. Please respond.

SB: The feedback we’ve gotten isn’t just about the R&D number. It’s “Cut costs. Cut them more.” But in R&D, when you’re giving someone some people today, you’re really, giving them more people tomorrow. So we need to flatten that curve a bit. There are plenty of areas where we spend less than the competition. Apple, for instance, spends much more (proportionally) on marketing than we do.

SA: Those layoffs you announced may have been the first major round you did. How are you absorbing that.

SB: We feel bad about the layoffs. Nobody wants a death by a 1,000 cuts. So we really thought it through beforehand. I “revectored” my Christmas and New Years to go over this. “While it’s not fun, they’re moving forward with good attitudes.”

SA: Talk about future markets, opportunities

SB: PC market will shrink nearterm, but when it turns around Windows/Office will go gangbusters. Cloud-based services has big growth. Big possibilities in servers/mainframes. On a percent basis, fastest growth will be in search, phones. Those things will grow quickly, but we’re still in investment mode. Xbox we’ve turned the corner on. We’ve paid our upfront costs. Have big base of subscribers, and a real opportunity for it to be “more than a console” and I think you’ll see that 12 months from now.

On convergence: Zune needs to come from the cloud and support the TV. It will support the phone/mobile device, and it has to run on the PC. Right now it’s on a device but it broaden from there. LiveMessenger will work the same way.

But the PC has real advantages compared to TV or mobile. TV has no intelligence. The phone today is pretty nascent. There will be about 300M PCs sold this year, compared to 20M iphones or Windows Mobile phones. PCs are open. PCs are compatible. So importance of PC-centered innovation…most of the new media creation, the PC will actually be the primary target device, for now, and eventually the same type of opportunities will be available on three screens, from the cloud.

SA: What about M&A?

SB: “We don’t have an acquisition strategy. We have a business strategy that might lead to acquisitions.” We did 20 deals last year. We’ll do about 20 this year. Most between $10M and $400M in value. “But will be buy many things things that are $2, $3, $4B and up? We could.” But I’m not sure we will. But integration is hard. And pricing is hard. “Nobody knows what asset values should be, at least until the economy finishes resetting”. I only get involved in deals about “a couple hundred million”.

[Missed some parts about evolution in Ballmer's management style. Apologies]

SA: Is it better now that Bill Gates is gone?

SB: “It’s different”. We’re growing, but “we miss Bill.” But everyone values what Bill is doing with this nonprofit, and everybody relishes the chance to grow. Windows 7 is a great product, that we’re building without Bill’s involvement.

SA: You recently called on government to invest in innovation. What should they be doing?

SB: “A lot of basic research in this country needs to be funded by government.” A lot of important research has come out of government, and I think it’s important that they understand it. GDP growth comes from basic transformations in science and the business cycle. “The most important thing is that the government says, he we believe , and we’re going to put our money where our mouth is” on the science side.

On the education side, anything we can do to shore up what is the best set of universities, I think the more we can keep that system healthy, the better.

“I’m not going to pretend to be the expert in how that happens.”

SA: You’ve made a lot of money [then a dig at Forbes]. What would you do if you weren’t running Microsoft?

SB: “I’m not really sure. I don’t really allow myself much time to think about it, because you might fall in love with it, if you think about it too hard.” I have kids who are 13, 14.

SA: So you’re saving for college?

SB: I mean that we’re not moving out of Seattle anytime soon. But if there’s one thing that captivates me, I think it’s education.

Friday, March 20, 2009

IE8: A Notable ImprovementAs Originally Posted to The Wall Street Journal

The Web browser is arguably the most important piece of software on a computer. No longer just a tool for perusing or searching for information, it has become, for many people, their principal communications medium, their photo album, their newspaper, social club, bank and shopping mall.

And, among Web browsers, by far the most popular is Microsoft's Internet Explorer, or IE, which comes on every new Windows computer. So when Microsoft changes Internet Explorer, those changes affect vast numbers of people, and the Web itself. This week, Microsoft is changing its browser in a major way. On Thursday, the company will release IE8, the biggest overhaul of Internet Explorer in years.

I've been testing IE8 for months, first using its prerelease versions and, more recently, the final version. I've found it to be a big improvement over its predecessor, IE7, and a much closer competitor to its main rival, Mozilla's Firefox. IE8 is more stable than IE7, more compatible with industrywide Web standards, and packed with new features that improve navigation, search, ease of use, privacy and security.

Some of these features can't be matched out of the box by its main rival browsers. For instance, related tabs are color-coded, the search field can show images along with text, you can get instant fly-out maps of place names in Web pages, and you can easily hide your tracks online from the prying eyes of advertisers.

But, in my tests, IE8 wasn't as fast as Firefox, or two other notable browsers -- the Windows version of Apple's new Safari 4 and Google's Chrome. IE8 loaded a variety of pages I tested more slowly than any of the other browsers, and it grew sluggish when juggling a large number of Web pages opened simultaneously in tabs.

For that reason, I can't say that IE8 dethrones my previous browser champ, Firefox. If you're a light-duty user and attracted to the new IE's strong suite of fresh features, you might prefer it to Firefox. But if you would be bothered by the speed difference, or the slowdown I saw under a heavy load, Firefox would still be better.

Microsoft is making IE8 available, free, at noon EDT Thursday, for both Windows XP and Windows Vista, at microsoft.com/ie8. A version also will be tailored for the forthcoming Windows 7, the next edition of the company's operating system. But that version won't be available until the next prerelease iteration of Windows 7 comes out. It will also be automatically offered via the Windows Update system over the next few months.

Unlike its competitors, IE8 won't be available in a Macintosh version, though I found it worked fine on a Mac that is running Windows alongside the Mac's own operating system.

Favorites and Tabs

This new Internet Explorer looks a bit different, right away. It finally displays, by default, the old Links bar, now renamed the Favorites Bar. This is a toolbar near the top of the screen where you can store your most-used Web sites or folders containing groups of frequently visited sites, for convenient access. It's like the Bookmarks Toolbar in Firefox or the Bookmarks Bar in Safari. This bar was available in older versions of IE, but was hidden unless you turned it on.

And this Favorites Bar has a couple of nice features. There's a one-click button that will add any Web site to the bar, as opposed to adding it to the longer Favorites list of less-frequently visited sites. And, to help fit as many sites as possible on the bar, IE8 has a command that automatically condenses the titles of the entries.

There are also big changes in the way tabbed browsing works. In IE8, tabs you open from links on the same Web site are grouped together and color-coded. And when you have too many tabs to see at once, you can click on a button to see mini images of the pages they represent, or, alternatively, you can get a quick text list of all of them.

In addition, when you create a new, empty tab, IE8 displays a number of choices inside the page. These include the ability to reopen tabs you've closed or to perform various actions on text you've copied, such as emailing or blogging it.

There also is an optional Suggested Sites feature, which pops up a list of other Web pages that might be similar to, or related to, the page you're viewing. This feature doesn't always do a great job, but when it works, it's handy. For example, when I was reading the BBC's Web site and clicked Suggested Sites, IE8 listed a variety of other British news sources I hadn't bookmarked.

Addresses and Search

Like the other major Web browsers, IE8 now also makes smart suggestions about what you might be looking for when you type something into its address bar or its search box. In the address bar, these are based on your history and your Favorites. In the search box, they are based on suggestions from whatever search engine you choose to view in the box, plus your history. All of these suggestions are organized nicely. (If you are using Windows XP, you must install Microsoft's desktop search product for all of these features to work.)

But the IE8 search box does two cool things the other browsers don't. First, it allows search engines to show images in the search results that drop down from the box, something Microsoft calls Visual Search. With some providers, like Google, you don't see images, at least not today. But with others, such as Wikipedia and Amazon, images show up.

Second, and more important, IE8's search box lets you switch search providers on the fly by just clicking on an icon at the bottom of the results list. So, for instance, you could type in Red Sox, see the results in, say, Google, and then without retyping your search term, almost instantly get different results from Yahoo or from Microsoft's Live Search engine, by just clicking their icons.

Surfing Tools

IE8 includes a new feature called Accelerators, which can perform specific actions on any text you select in a Web page, often without taking you to a new page. When you select text, a light-blue icon appears near it. When you click on that icon, you get a list of options. For instance, you can translate the text to another language, email it, blog it or, if it's a place name, map it.

Depending on which company's services your chosen accelerator is using, these actions can happen right on the page you're viewing, in a fly-out panel. For example, I selected the word "Beijing" in a news story, chose Map with Yahoo from the Accelerator list, and got a map showing Beijing in a small window atop the same page.

When you install IE8, Microsoft suggests you use its own set of accelerators, but gives you the option to choose from Google, Yahoo and other competitors. A full list of accelerators, search engines and other add-ons for IE8 is at ieaddons.com at the bottom left of the page.

Another nice feature is called WebSlices. This requires some effort on the part of Web page publishers and is on only a small number of pages right now. But it allows a user to add to her Favorites bar a constantly updating section of a Web site, complete with graphics, by just clicking a green icon that appears on the site. For instance, I added to my Favorites bar a slice that shows the top stories on digg.com.

Speed and Stability

Microsoft claims IE8 is very fast, but in my tests, speed and performance were its worst attributes. Using two computers, one running Windows XP and one running Windows Vista, I timed the loading of a half-dozen popular Web sites, plus two folders containing numerous news and sports sites. I repeated the test in IE8, and in Firefox, Safari 4 and Chrome. In every case, IE8 loaded the pages and folders more slowly than most of the other browsers, and in most cases it came in dead last.

In some instances, the differences were tolerable -- a few seconds. In others, primarily the folders containing nine or 21 sites, respectively, IE8 took two or three times as long as one or more of the other browsers to complete the task. Microsoft conducted its own tests, which show IE8 winning similar tests, but I rely on mine, which I also use when evaluating its competitors. You can judge for yourself.

IE8 never totally crashed on me. This is partly because when one tab crashes, it's designed to leave the others unaffected. However, in my tests on both machines, I found that IE8's general operating speed -- things like opening menus or switching among tabs -- slowed down noticeably when I had 15 or 20 sites opened in tabs, even after they finished loading.

Security and Privacy

By contrast, IE8 shines in the areas of protecting you on the Web. Like other browsers, it warns you when a Web site you've reached might be a phishing page, designed to steal your identity, or a page that's known to distribute malicious software. And, like others, IE8 allows you to conduct a private browsing session that won't leave any history or other evidence on your own PC.

But IE8 also has a feature, called InPrivate Filtering, that the company says will optionally allow you to surf multiple Web sites without leaving the kinds of tracks on Web servers that allow advertisers and others to know where you've been and what you did there. I was unable to test the effectiveness of this feature, but assuming it works, it's a step forward in privacy.

Compatibility

IE8 had good compatibility with most Web sites I visited. But in some cases, it didn't render a page properly. This is mainly because some sites were designed for older versions of IE, which used proprietary page-rendering features that made some sites look good only in IE. With the new version, Microsoft is moving away from those proprietary features.

To solve this problem, IE8 includes a compatibility button you can click that will cause the browser to behave like older versions of IE and render the page properly. You have to click the button only once for each page, and IE8 will automatically do it for you on subsequent visits.

Bottom Line

Internet Explorer 8 is a well-done advance on an important product used by most people to surf the Web. If it were faster, I would say it was the best browser currently available for Windows. But even so, it will be an improvement for current Internet Explorer users, and might even tempt some folks to switch.

Privacy Group RequestsInvestigation Of Google By FTC As Originally Posted to The Wall Street Journal

A privacy group has asked the Federal Trade Commission to investigate whether Google Inc. has built adequate privacy protections into its software services, such as Gmail and the company's word-processing and spreadsheet offering, Google Docs.

The Electronic Privacy Information Center filed the complaint Tuesday, a few weeks after Google admitted to accidentally sharing a small number of documents with users who lacked the permission to see them. The Washington, D.C., public-policy group has successfully prodded the FTC to make companies such as Microsoft Corp. change their privacy and security practices.

Separately, Google said that Dennis Woodside, a vice president, will succeed former Americas Operations head Tim Armstrong, who is leaving to become the new chief of Time Warner Inc.'s AOL. Mr. Woodside, 40 years old, has managed Google's relationships with big European advertisers and agencies as vice president for the U.K., Benelux and Ireland, one of the company's biggest revenue-generating units outside the U.S.

In a statement, Omid Kordestani, Google's senior vice president of global sales and business development, said Mr. Woodside's "combination of entrepreneurialism and operational excellence" make him well-suited to take on the position. Mr. Woodside will be responsible for maintaining Google's relationships with the large U.S. advertisers from which it is trying to lure more business.

Meanwhile, Google was delivered a fresh attack from a privacy group that argues that using online software hosted by big technology companies such as Google, as opposed to software that runs on individual computers, raises a number of privacy concerns.

In particular, EPIC is asking the FTC to require Google to revise its terms of service to better explain its obligations to protect the data it obtains. EPIC Executive Director Marc Rotenberg said in an interview that he doesn't believe that Google is being upfront with consumers about the risks of using its online software, which is becoming more mainstream.

"It's an opportunity to let the commission look at the issue more closely, and I think Google is the right place to start," Mr. Rotenberg said.

A spokesman for Google said in a statement that the company hadn't yet reviewed the complaint in detail but had policies and technology "to ensure the highest levels" of data protection. "We're highly aware of how important our users' data is to them and take our responsibility very seriously," he said.

The complaint comes as Google has ramped up efforts to sell government technology officials on the benefits of upgrading their current systems to use "cloud computing" software applications such as Gmail. It also comes as the FTC, now under control of Democrats, has signaled its interest in taking a tougher stance regarding online privacy.

A Rare Steve Case Appearance at AOLAs Originally Posted to The Wall Street Journal

In a rare appearance, AOL founder Steve Case told employees Tuesday that the company needs to focus on Main Street, not Wall Street, as it makes another attempt at a turnaround under new CEO Tim Armstrong.

At the town-hall meeting, held by Mr. Armstrong at AOL’s Dulles, Va., campus, Mr. Case said skeptics didn’t believe in AOL when he started the company, so we shouldn’t be disheartened that they don’t now, according to staffers in attendance.

In his first public address to workers before officially taking the reins on April 7, Mr. Armstrong also talked about his respect for AOL’s products and services coming from Google, where he has been a senior vice president. He added that he hoped to continue the advertising partnership between AOL and Google. Google has said it plans to sell its 5% stake in AOL.

Ted Leonsis, AOL’s former vice chairman, also joined the pep rally, saying that AOL can be around for another 25 years if it can get back to being focused on products and customers.

In calling on Mssrs. Case and Leonsis to address staff, Mr. Armstrong appears to be invoking a symbol of AOL’s heyday to set the tone for his leadership. The beleaguered Internet company has been a thorn in Time Warner’s side since the 2001 merger, and Mr. Case has kept his distance from the company in recent years. Mr. Armstrong’s surprise appointment last week is seen as a sign that Time Warner is seriously considering a spinoff of all or parts of AOL.

Thursday, March 19, 2009

The world's most popular search engine in getting larger by the minute. For more perspective on the Google System and its scalability, let's review some 2007 outtakes from key Google execs.

CEO Eric Schmidt:

“Search was, and is, and I suspect will be for many years, the killer application,” Eric says. “We have more engineers working at Google on search than we do anything else.” And: “As the web gets bigger, you need a bigger index ... It’s like looking for more needles in larger haystacks.”

Personal search is the next big phenomena, Eric says. The best search is a personal search – one that we arrange, we control, etc. This is going to become the theme of Google as they move forward, Eric proclaims, stating that (and this surprises Eric) iGoogle is exploding in its use. Eric likens iGoogle to a ring-tone as people love to personalize it.

Eric continues to say that Google likes to tackle things with the help of partners, sharing revenues, and that there are lots of challenges ahead; growth, society and the future. “What are the next billion people who come online going to do? Are they going to democra

tize the web? Are they going to bring more languages? I don’t know, but I know they’re going to come.” Eric mentions a Venezuelan TV station that survived by coming online... and using YouTube. This was an important event for the people of Venezuela.

Eric talks about how soon, it will be possible to walk up to a computer and make it yours: the “Be Mine” command. Securely, safely, without any question of theft. And then, when you’re done, you’ll say “Be Gone” and you’re logged out.

Marissa Mayer:

So far, she spoke about the core principles and components of search – the four answers which create the entire experience that you have on Google:

1. Comprehensiveness

2. Relevance - Which goes first? Apples, oranges or grapes? This is what they’re doing with websites, Marissa says: it’s a question of ranking and ordering the results, the question being how can they rank the results in the most relevant way possible?

4. User Experience - Google asks themselves, “Do the results make sense? Is it easy or hard to understand the answers and the layout of the pages?”

With that in mind, Marissa says she wants to take a look at Google’s past, present and future. In the early days, around 1998, the world wide web would fit on one slide. This year is Marissa’s 8th year at Google, and they now have 10s of billions of slides, grown by more than a factor of 1000 in eight years. Back then, you could organize all websites in a manual directory, as Yahoo did, but as the web exploded search became a necessary tool.

Google is constantly working to crawl and include more and more content, Marissa says. In June 2000, a year after Marissa joined, it was the time of GIGA Google – 1 billion web pages crawled. Next search engine had 600 million. As you include more pages, relevance bec

omes a problem. In the early days, users got used to hunting and pecking at results. Google realized their job was to provide the best result first, and that if they did their job right, the user shouldn’t have to click “next” or even scroll. This lead to the “I’m Feeling Lucky” button, which has by now been translated into many languages.

Basically Marissa says Google realized they only had a few users, but they started to see the user base grow due to people getting better search results – which made it spread across the US and internationally.

Marissa says there are a lot of speed advances in the past 20 years. Two decades ago, you’d go to the library, look things up, get journals out and find your answer. Many questions would go unanswered because it wasn’t worth spending hours researching some questions. Then, you could email friends and sometimes they had the right answers. But with internet search, people could get answers within a second. But at some point, Google will be up against the constants of physics – though they’re aiming for light speed searches.

In an early Q&A that followed, Marissa was asked about the size of Google’s index and told the press it is “10s of billions of pages” and “three times bigger than next nearest rival.” (I wonder what Yahoo has to say on that...) Also, someone mentions how Jason Calacanis

thinks the internet is polluted, and that we need a human edited search engine. Marissa replies that when the ’net is large & polluted, you need more sophisticated means to help people find information. Ideal, she says, is a “blend of both” an algorithmic search engine and a human-edited one.

After lunch break, the presentation continues, and Marissa shows screenshots of the evolution of the Google homepage over the last eight years.

Apparently the first version of the homepage was so simple in the because co-founder Sergey Brin didn’t know much HTML. Marrissa adds that her family gives her a hard time over the look of the Google search result pages, as they say, “It looks the same! What do you do at work?”

Marissa goes on to speak about improvements to web search. One example are Google’s alternate queries; search for ABC Survivor and Google understands the semantics of this query and suggests “CBS Survivor” as well. Marissa also mentions that that Google serves different results for different locations - e.g. Cote D’or in Australia will return the chocolate brand, but in France they’ll localize the results to the region in France. (And in Belgium, they’ll return both.) Speaking on the future of search, Marissa mentions the Cross Language Information Retrieval designed for search in one language, to find documents from other languages,

translated back to your preferred language on the fly, and she reiterates the universal search concept, saying that “information silos” – Image search, Blog search, News, Video etc. – are united to break down search barriers.

Marissa also touches the subject of personalization. “I think the really powerful part about all this is that we can take information from Web History and iGoogle so that we can create a search engine of the future.”

In a second Q&A with Marissa, someone asks about potential copyright issues when the Cross Language Information Retrieval is republishing full pages for its translation service. Marissa admits that they translate search phrase, titles, descriptions and entire web pages, but that they believe this is legal with regards to copyright law. Another question mentions that Wikipedia is heavily featured in Google results; does Google have discussions about reliability and authenticity of any results, e.g. should the BBC website rank more highly than someone’s blog? Marissa answers that PageRank is user-driven by linking to pages. Links feed into page rank, anchor text, etc., so those types of links to

Wikipedia happen because people like the content and link to Wikipedia pages.

Questioned on googlebombing, Marissa says that links on blogs often look like googlebombs when they’re not. But she also says that googlebombs often become the “right result” in itself because people searching for e.g. “miserable failure” actually want to find a page on George Bush! When asked how much Google invests in video image recognition, Marissa states that voice-to-text recognition is more important for video search because it’s further along than image recognition.

Urs Hölzle (Google Senior Vice President, Operations) is responsible for energy usage and carbon dioxide emissions. Google has a focus on cutting their emissions and “working to raise industry standards,” but the average Google data center catering to the internet’s many users and services wastes power. Computers use a lot of energy, which turns to heat, which needs cooling, which needs more energy. Urs says in a typical data center, up to 65% of the energy is lost – only 35% reaches the computers!

Urs Hölzle:

To tackle some of the issues, Google is committing to being carbon neutral. They already use evaporative cooling, Urs says, which according to him results in data centers that use “50% less energy than standard industry data centers.” Goog

le also runs a shuttle service on Bio diesel in the San Francisco area, gives free bikes to employees, uses video conferencing to reduce travel, and has solar panels installed at their headquarters. Urs says that Google is “offsetting what is left,” which he says isn’t always the best, but a “good compromise.” Urs’ speech ties into yesterday’s announcement of Google Recharge, as well as the recent Climate Savers Initiate.

Also on stage speaking now is the French photographer Yann Arthus-Bertrand, who specializes in aerial photography and whose works have “both political and aesthetic connotations,” as Wikipedia writes. Yann talks about the people who are

going to suffer with global warming. Jim Walker of the Climate Group – which Google joined a couple years back – also makes an appearance, stating that Google’s announcements are “encouraging” and that they “reinforce their vision” on environmental issues.

Tuesday, March 17, 2009

Cybercriminals are spreading invisible infections far and wide across the Internet by hammering hundreds of thousands of websites each day with so-called SQL injection attacks.

The trend started last summer and has continued to accelerate. IBM Internet Security Systems says it identified 50% more infected Web pages in the last three months of 2008 than it did in all of 2007.

Click on one and you won't notice anything. Your PC gets turned into an obedient "bot," short for robot, deployed to attack other computers. All of your sensitive data get stolen.

SQL attacks take aim at the database layer of websites. They typically were manual attacks designed to pilfer customer data from merchant websites. But last June someone figured out how to automate the attacks, and use them to plant infections.

"It was a brilliant tactical move. You sit back and wait for someone to visit the site, and soon you infect thousands of PCs," says Ryan Barnett, Breach Security's director of research.

An infected PC thereafter gets put to work delivering spam and spreading more infections. And any sensitive data, such as log-ons and account numbers, get stolen.

For the first five months of 2008 IBM ISS helped large corporations block about 5,000 SQL attacks a day. By mid-June, daily attacks spiked to 25,000; by October they topped 450,000 a day. Holly Stewart, IBM ISS threat response manager, says the infections take advantage of security flaws in cool website features, such as online-delivered video, music, photos, documents and work files.

"Web applications are one of the most outward facing components a corporation could have, and one of the least protected," she says. "And SQL injection is the fastest-growing category of attacks affecting Web applications."

Giant financial institutions and online merchants have put up strong defenses, says Phil Neray, vice president of security strategy at Guardium, a database security firm. "The same is not necessarily true of regional banks and credit unions, smaller online retailers and state government agencies."

Security experts say consumers must keep updates for anything to do with their browser current, though most now do not do this. This includes updates for Internet Explorer, Firefox, Safari, Opera, Chrome, Adobe Flash, Adobe Reader, iTunes, QuickTime, Windows Media Player and RealPlayer. Such updates increasingly include important security patches that can block infections from taking hold.

Monday, March 16, 2009

Google's Data Mining System - Packaged For The MassesAs Originally Posted to The New York Times

Cloudera is the quintessential Silicon Valley story.

Three of the top engineers from Google, Yahoo and Facebook have teamed up with an ex-Oracle executive to tackle the problems inherent in quickly analyzing big piles of data. On Monday, they’re revealing a commercial product based on the open source software Hadoop, which provides the analytical magic behind the world’s biggest Web sites. The team at Cloudera, based in Burlingame, Calif., think they can extend Web smarts to the business world, aiding companies in retail, insurance, bio-tech and oil and gas.

Hadoop is the open-source version of the file system and MapReduce technology developed by Google. Google has used such software to rewire its entire search index, making it possible for the company to run ever-faster searches on cheap servers and to ask questions of its vast data stores and receive coherent answers.

Rather than keeping data locked in a central database, Google spreads information across thousands of servers. Engineers can then send out requests to these servers via MapReduce and gain new insights into peoples’ searching behavior and the relationships between Web sites. This process makes for more consistent Google search engine optimization results, and best of all, MapReduce keeps these complicated jobs humming along even when computers fail because of its ability to maintain a cohesive picture of all the systems.

While Google has kept the deep details on this technology to itself, the company did publish a couple of papers describing some of the underlying principles. That gave Doug Cutting, formerly a software consultant and now a Yahoo engineer, enough information to create an open-source take on the code.

Yahoo has since invested millions of dollars improving Hadoop and uses the technology to figure out what users should see on its home page, based on their surfing habits, and what ads to display next to search results.

Other Web 2.0 users, including Microsoft, Facebook and Fox Interactive Media, have picked up Hadoop as well.

The founders of Cloudera argue that the analytical powers of Hadoop can benefit a whole new class of businesses. For example, they want to show biotech firms new ways of analyzing genome and protein data and give oil and gas firms new ways of digging through their reservoir data.

The pitch has proved attractive enough for Accel Partners to pump money into the start-up. Diane Greene, the co-founder of VMware; Marten Mickos, the former chief executive of MySQL; and Gideon Yu, the chief financial officer at Facebook, have invested in the company as well.

While Hadoop remains free, Cloudera plans to sell support and consulting services around the software.

The backgrounds of the executives point to the classic Silicon Valley nature of the story.

Just 26, Jeff Hammerbacher has already worked on Wall Street and at Facebook after graduating from Harvard, where he earned a degree in math. Christophe Bisciglia, 28, arrived at Google after raising and selling horses online during his high school years.

Amr Awadallah, 38, arrived in the United States from Egypt and secured a job at Yahoo, where he helped develop Hadoop. And Mike Olson, the 46-year-old chief executive, is a database executive that sold an open-source software maker called Sleepycat to Oracle in 2006.

While Google could make a fuss about intellectual property rights to the technology, the company has given Cloudera its blessing. Mr. Bisciglia discussed the company with Google’s chief executive, Eric Schmidt, last March.

“He agreed that this technology is not just for researchers, and it’s good for Google to make this pervasive,” Mr. Bisciglia said. “The more data people create, the more data Google can slurp up.”

A number of prominent computer scientists have hailed Hadoop as the right answer for an age when companies have moved from dealing with gigabytes of data to terabytes and now petabytes (one petabyte is equal to 1 million gigabytes or 1,000 terabytes). It’s one thing to store all of that information and another thing to be able to mine it in an efficient manner.

“It is a new reality that people have the ability to store and analyze terabytes and petabytes of data,” Bisciglia said. “Now they need the tools to process it.”

Hitwise, which sampled 10 million U.S. Internet users, has shown Google at the same level for the past few months. A year earlier, Google accounted for 66% of all U.S. searches. Meanwhile, the portion of searches on Yahoo, MSN and Ask fell 17%, 20% and 10%, respectively.

While Google apparently is maintaining its lead as a search engine, the company's advertising business appears to be under increasing pressure as fewer shoppers search for products online and advertisers spend less. Earlier this month, Chief Executive Eric Schmidt said the economic situation is "pretty dire" and his company is "not immune" to current conditions.

Google's shares recently traded up 6%, amid a general market rally. The stock price has lost almost half its value since May.

The Hitwise figures also show search engines continue to be the main way Internet users navigate to industry categories, and that organic search engine optimization is still the best way to push your site rankings. Comparing February numbers with a year earlier, business and finance, sports, online video and social-networking categories showed double-digit increases in the share of traffic coming directly from search engines.

In addition, the Hitwise survey shows the length of search queries has increased in the past year to more than eight words from an average of five.

Google Searches as Early Warning For Disease OutbreaksOriginally Posted at The Wall Street Journal

Last summer, for a month before Canadian officials announced an outbreak of listeriosis that would kill some 20 people, Google searches seeking information on the disease were on the rise.

That finding, published this week in Canadian Medical Association Journal, is the latest sign that public-health types are trying to figure out how to mine Internet search data as a potential early-warning system for disease outbreaks.

There is a certain, basic logic to all this. You find out someone in your family has listeriosis, you go home and Google it. Multiply that across an outbreak, and it will add up. Interestingly, researchers found that searches for “listeria” — a less technical term for the disease, which is caused by eating tainted food — rose only after the official announcement, perhaps in response to media stories that used the term.

The authors point out some important unanswered questions about how public-health officials might actually use data from the likes of Google. There would likely be lots of false alarms, as factors other than a true disease outbreak prompted search spikes. And it’s unclear just how much of a spike from baseline levels would warrant further investigation.

What’s more, the potential false alarms might spook the public. Google already offers Google Trends, which lets anybody see how the volume of searches for a given term changes over time.

The paper was written by researchers from Harvard Medical School and the Ottawa Health Research Institute. The Harvard author has received research funding from Google.org as well as the National Institutes of Health.

Time Warner Hunts Head At Google For New AOL ChiefOriginally Posted at The Wall Street Journal

Time Warner Inc. announced a leadership overhaul at its AOL unit Thursday, naming Google Inc. Senior Vice President Tim Armstrong to succeed its chairman and chief executive, Randy Falco.

In a move that could be a precursor to a spinoff of all or parts of AOL, Time Warner said Mr. Falco and his No. 2 -- President and Chief Operating Officer Ron Grant -- will leave the company, clearing the way for 37-year-old Mr. Armstrong to take AOL's reins next month.

Mr. Armstrong's vault to AOL is seen as a major coup for the Time Warner unit, which has been limping badly in its efforts to shift to an ad-supported business model under Mr. Falco. Mr. Armstrong said he looked forward to exploring "the right structure and future for AOL."

The reshuffling is the latest in a number of shakeups at AOL. As the unit's performance has soured and its brand faded, Time Warner Chief Executive Jeff Bewkes has flagged a possible spinoff or merger with a rival. Mr. Bewkes spent much of last year attempting to orchestrate a merger with Yahoo Inc., but a deal failed to materialize.

AOL, which saw a 20% slide in total revenue last year, has ushered in several new senior executives, including former Yahoo executive Gregory Coleman last month to succeed Lynda Clarizio as president of its Web advertising division. He became the third top ad sales executive at the company in little more than a year.

Mr. Armstrong's move is a blow to Google, which has lost several senior executives in the past year. The company's senior connection to Madison Avenue, Mr. Armstrong was a member of Google's Operating Committee, the core group of executives who lead the company, and on the front lines of its plans to expand into new advertising formats.

But those efforts have been slow going, despite major acquisitions Mr. Armstrong helped shepherd, and people close to Google have suggested there wasn't much further he could climb.

He considered leaving the company in 2007, according to people familiar with the matter, but stayed after Google CEO Eric Schmidt and others fought hard to keep him.

In a statement Thursday, Mr. Schmidt praised Mr. Armstrong's contributions to Google and said the company would announce an internal candidate as his successor in the coming weeks.

Mr. Armstrong said in an interview that Time Warner came to him in recent weeks to discuss taking over the top job at AOL. He said his first priority is to meet with company employees to better understand the culture, then plot out his strategy for the Internet company.

"They've done a very nice job of growing traffic. They are in a position now to be a major player in all types of Internet- based advertising," he said.

AOL is the fourth-largest Web property behind Google, Yahoo and Microsoft, attracting 108.4 million unique visitors in January, according to comScore.

Pali Research analyst Rich Greenfield said Mr. Armstrong's appointment was a "significant positive" for Time Warner shares, and noted that the only reason an executive of his pedigree would take such a role would be "the ability to manage a public company of his own in the near future."

The overhaul is an admission that AOL's strategy has fallen short of Time Warner's expectations. Mr. Bewkes plucked Mr. Falco from NBC to run AOL in November 2006.

He also dispatched Mr. Grant, a trusted lieutenant, to help reshape the struggling unit, which had become a thorn in Time Warner's side since its disastrous merger in 2001.

Mr. Falco and Mr. Grant couldn't be reached to comment.

While Mr. Falco had little Internet industry experience, Time Warner executives hoped that his cachet with Madison Avenue would help the company in its transition to an ad-supported business.

But Mr. Falco struggled to shake off criticism that he was a television executive who didn't understand the Web.

Mr. Falco attempted to turn around the business with more than $1.6 billion of acquisitions. But AOL is still struggling to digest those acquisitions, against a backdrop of slowing advertising growth and slumping subscription revenue.

Yahoo's Request to Move American Airlines Lawsuit DeniedOne More in a Long Line of Pay Per Click Trademark Infringement Lawsuits

from Mercury News

Yahoo's request to move suit denied

A federal appeals court has rejected Yahoo's bid to move a trademark lawsuit filed by American Airlines from Texas to Northern California.

Sunnyvale-based Yahoo wanted the case transferred because its sponsored search agreement says any disputes must be settled by courts in Northern California or another site picked by the company.

But a three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans ruled Wednesday that the contract clause didn't apply to the trademark claim made by American.

American sued Yahoo last year in federal district court in Fort Worth — American's hometown — charging that Yahoo's search policies infringed on the airline's trademarks.

American complained that when visitors to Yahoo's Web site typed in trademark terms such as AAdvantage, the name of American's frequent-flier program, the search engine directed them to competitors who pay Yahoo for the traffic.

Thursday, March 12, 2009

Hotels Using Social Networks To Build ConnectionsAs Originally Posted at PR Web

TravelCLICK Launches Social Media Optimization Solution at ITB in Berlin

Chicago and Berlin (PRWEB ) March 11, 2009 -- With the increasing number of social media and consumer-generated content (CGC) sites, people are spending their time online differently. Today it's about conversations--interactions that go beyond the one-on-one to one-to-many through a series of networked relationships that connect us to people, places and events like never before. To avoid being left behind, hotels need to consider being on the sites where consumers now spend their online hours. According to Jerome Wise, vice president of eCommerce for TravelCLICK International, the challenge for hoteliers is to understand these evolving channels and how they can be used to reach new markets. "Social media can provide an essentially 'free' sales and marketing channel for building connections, community and, ultimately, commerce for hoteliers who are savvy in the new order of online marketing," said Wise.

Understanding how to leverage this trend to grow brand awareness and consumer reach through proactive product placement in the social media sites is an essential element of the marketing mix for today's hotel marketers. Consistent, targeted branding and relevant messages are the keys to leveraging the power of these networks.

In response to this need, TravelCLICK is introducing a new Social Media Optimization (SMO) solution for hotels and cruise marketplace leaders. The personalized program is designed to harness the viral power of the social networks--such as Facebook, Bebo, and StudiVZ--to connect hotels with new target audiences worldwide. The offering leverages the expertise of TravelCLICK's award-winning Internet Marketing Services team to develop and implement a hotel-specific social media plan, including:

Research and strategy to determine the most appropriate sites, depending on the hotel's profile and target guest demographics

The benefits of SMO go beyond leveraging social networks for their marketing value. By having a targeted strategy across sites, hoteliers and purveyors of discount Canada cruises can increase traffic to their website and also enhance their search engine optimization ranking by increasing the amount of strong content and relevant links to and from their hotel website.

"According to Google™, networking is going to be the second-most popular online activity by 2012, overtaking shopping and surpassing both communication--such as email--and entertainment," added Wise. "Hoteliers who explore social networking early on in its development will have a clear competitive advantage as it matures."

With this new capability, TravelCLICK brings even more power to its comprehensive online Internet marketing solution, which includes award-winning website design, robust content management, customized landing pages, search engine optimization, pay-per-click advertising, email marketing, and linking--all designed to drive bookings through a hotel's most profitable channel, its own website.

About TravelCLICK Inc. (www.travelclick.net)TravelCLICK, the leader in hotel e-commerce solutions, provides a continuous flow of high-value online bookings to hotels and discount Mexico cruises worldwide. A uniquely comprehensive one-stop solution, TravelCLICK offers market intelligence, distribution, electronic marketing, and media solutions delivered with personal attention and local market expertise. With revenue optimization experts in every global market, we help our clients make better business decisions, generate greater demand from the right mix of channels, convert more shoppers to high-value guests, and increase revenue and profitability. Serving the hospitality industry since 1999, TravelCLICK has more than 13,000 customers in 140 countries with offices in Barcelona, Chicago, Dubai, Houston, Phoenix, Melbourne, Shanghai, and Tokyo.

Wednesday, March 11, 2009

Google To Tie Ads To Surfing PatternsAs Originally Posted to ReutersSAN FRANCISCO (Reuters) - Google Inc will begin to aim online ads at people based on their Web browsing history, joining an industry trend that has raised privacy concerns even as it makes product pitches more effective.

The new program, dubbed "interest based" advertising, is being rolled out on a test basis across Google's network of partner websites and on its video-sharing site YouTube, according to an announcement on Google's blog on Wednesday.

The move comes a few weeks after the Web search leader's smaller rival, Yahoo Inc, unveiled its own advertising enhancements, which rely on an individual's online activity.

While behavioral ad techniques have been around for several years, some past efforts have raised privacy concerns, and Google has refrained from offering such advertising until now.

"Advertisers are under increasing pressure to be able to tie as much marketing spend as they can to direct sales revenue," said Andrew Frank, an analyst at market research firm Gartner.

Until now, the types of text and display ads that Google served to Web surfers were based solely on the content of the specific Web page being viewed by an individual.

With behavior advertising, Google and advertisers will be able to consider an individual's broader history of Web surfing when deciding which ads to pitch.

"If, for example, you love adventure travel and therefore visit adventure travel sites, Google could show you more ads for activities like hiking trips to Patagonia or African safaris," Google Vice President of Product Management Susan Wojcicki explained on Google's blog, adding that advertisers have been asking Google for such features for a long time.

Advertising based on consumer interest or behavior have the potential to increase consumer response and so-called click-through rates, which translates into higher ad revenue for the sites.

But U.S. lawmakers held hearings last year on behavioral advertising, after concerns arose when a company called NebuAd, in a deal with cable company Charter Communication, disclosed a pilot program to track customers.

Congressman Rick Boucher, head of the telecom subcommittee of the House of Representative's Energy and Commerce, has said the issue will be a top priority this year. The Virginia Democrat's office had no immediate comment on Google's plans.

MORE REGULATION?

The U.S. Federal Trade Commission recently expanded its voluntary guidance on how websites inform consumers that their data is being collected, to include mobile and Internet companies. Regulators have warned that failure to comply would lead to tougher regulation.

In announcing the initiative on Wednesday, Google said privacy issues were an important consideration. "This kind of tailored advertising does raise questions about user choice and privacy -- questions the whole online ad industry has a responsibility to answer," Wojcicki said in the blog post.

Google said it has three key safeguards: consumers can choose to opt out of the program; consumers can edit their profile of preferences based on online activity; and consumers can click on a button to learn how an ad was pitched to them.

Marc Rotenberg, executive director of the Electronic Privacy Information Center, said that regardless of Google's efforts to address privacy concerns, the company's new ad program "throws up red flags" for Internet privacy.

"This is the Internet's largest search company now profiling and tracking Internet users. That shouldn't happen," said Rotenberg. He said his organization was evaluating "possibilities" about a potential response to Google's move, but declined to specify what options were under consideration.

But Ari Schwartz, vice president of the Center for Democracy and Technology, said there are positives in Google's plan, including users getting access to their own profile.

"On balance it is a step in the right direction," said Schwartz, whose group was consulted while Google developed its plan. But he noted that Google plans to still rely on consumers opting out, rather than in, which most of the public opposes.

Google, the No.1 Internet search engine in the United States, generates 97 percent of its revenue from advertising. Much of that comes from text ads that appear alongside search results.

Google acquired DoubleClick for $3.2 billion in 2008 in order to beef up its position in the market for display ads.

Adopting behavioral ad techniques is "a logical way for Google to get better at the display game," said Emily Riley, a senior analyst at Forrester Research.

In particular, she said, the vast size of Google's AdSense network of partner Web sites and the company's technology could generate valuable data for marketers and advertisers.

"In theory they should have great scale with the behaviors they're tracking," said Riley.

Google disclosed Saturday that it shared a very small number of online documents with users who weren’t authorized to see them.

The privacy glitch, caused by a software bug, affected just a tiny fraction of documents — an estimated less than .05% — wrote Jennifer Mazzon, Google Docs product manager, on a corporate blog. Google notified users affected by the bug on Friday and reversed the mistake, she said.

The bug hit users who changed their sharing settings on multiple presentations and documents at once, causing Google to share those documents with other users with whom the document owner had shared a document before, Ms. Mazzon wrote.

Though contained, the mistake underscores another pitfall of online software: the chance that someone may gain unintentional access to it.

By storing software online with Google and other providers – as opposed to keeping it downloaded to a single computer – multiple people can view and update a document at once. But the systems for managing those permissions can break down, causing documents to end up in the wrong hands. Proponents of online software also argue that the more traditional model of keeping software on a computer is prone to privacy problems as well. Someone could steal your computer, for instance.

Online software privacy breaches have been very rare. Outages or other reliability issues are slightly more common problems. (Google’s email service Gmail suffered one of those last month.)

Still, privacy problems are likely to be more damaging than the occasional blackout, especially for corporations that tightly manage their information and the government agencies Google is trying to court.

Google acknowledged the incident already caused them some pain of a different sort. “We understand our users’ concerns (in fact, we were affected by this bug ourselves),” wrote Ms. Mazzon in her post. “We’re treating this very seriously.”

Hitwise, which sampled 10 million U.S. Internet users, has shown Google at the same level for the past few months. A year earlier, Google accounted for 66% of all U.S. searches. Meanwhile, the portion of searches on Yahoo, MSN and Ask fell 17%, 20% and 10%, respectively.

While Google apparently is maintaining its lead as a search engine, the company's advertising business appears to be under increasing pressure as fewer shoppers search for products online and advertisers spend less. Earlier this month, Chief Executive Eric Schmidt said the economic situation is "pretty dire" and his company is "not immune" to current conditions.

Google's shares recently traded at $308.24, up 6%, amid a general market rally. The stock price has lost almost half its value since May.

The Hitwise figures also show search engines continue to be the main way Internet users navigate to industry categories. Comparing February numbers with a year earlier, business and finance, sports, online video and social-networking categories showed double-digit increases in the share of traffic coming directly from search engines.

In addition, the Hitwise survey shows the length of search queries has increased in the past year to more than eight words from an average of five.

Three More Criminal Charges For Governor Palin's HackerAs Originally Posted at PC MagDavid Kernell is not having a good week.

The college student who is accused of hacking into the private Yahoo e-mail account of Alaska governor and former vice presidential candidate Sarah Palin is now facing three additional charges.

Kernell, a 20-year-old student at the University of Tennessee and the son of state Rep. Mike Kernell, has already been charged with gaining unlawful access to stored communications and obtaining information from a protected computer via interstate communication – charges that could carry up to five years in prison and a $250,000 fine.

A grand jury has now added wire fraud, identity theft, and obstruction of justice to the list, according to a March 6 filing. In addition, the count alleging unlawful access to a computer "has been significantly changed," though the filing did not go into detail.

Kernell's legal team intends to file a motion to dismiss the additional charges. As a result, the trial date has been pushed from May 19 until late September or early October.

Kernell turned himself into authorities on Oct. 8. He is accused of hacking into Palin's "gov.palin@yahoo.com" e-mail account on Sept. 16 by successfully navigating Yahoo's password recovery system.

OK. We Get It. Microsoft Wants a Search Deal With Yahoo.As Originally Posted at ZD Net

Is it just me or does it feel like Microsoft is starting to sound - quite frankly - a bit desperate for a search deal with Yahoo?

The Times (UK) today blasted out the headline: Microsoft reopens door to deal with Yahoo!, citing an interview with Chief Operating Officer Kevin Turner. But we already knew that Microsoft wanted a Yahoo deal. CEO Steve Ballmer said so in January, shortly after new Yahoo CEO Carol Bartz came on board, and then again last month. Shortly after that, Microsoft CFO Chris Liddell said that a search deal would be an “incredibly useful step” but was quick to note that a deal with Yahoo is not a panacea.

Are there any other Microsoft executives that need to say it? Actually, in all fairness, I realize this isn’t a case of Microsoft execs calling press conferences every month to say that they’re still interested in Yahoo. The media asks the question and then builds a headline around the answer.

Bartz, who has also been peppered with questions about a deal with Microsoft, has finally suggested that everyone just chill out and wait. In comments at the Morgan Stanley Technology Conference, Bartz said:

I said this to Mr. Ballmer, I will not negotiate with you and 30,000 of my closest friends. I will negotiate privately. If something happens, you will know about it then.

Bartz seems to have the upper-hand here. She’s still sorting through the mess at Yahoo. She’s still re-organizing management. She’s still evaluating the properties and priorities within the site. She knows Microsoft wants a deal - but, clearly, she’s not yet ready to talk publicly about any deal with Microsoft.

At the Goldman Sachs Technology Conference last month, CFO Blake Jorgensen (who announced his resignation the next day) said that the company “is not opposed to a deal that would maximize the value of the business, be it a partnership or sale in the long term” but was quick to point out that search is a complex business that connects - literally, on servers - with other elements of the business, such as Mail and Messenger. He said:

It’s difficult to draw a line down the middle of the organization and split it into two. That doesn’t mean it can’t be done. It could. But we’d want to do it right.

In the meantime, Microsoft is moving forward and has started internal testing of its new search product, codenamed Kumo.

Monday, March 09, 2009

Are Google's Prospects Threatened by Firefox?As Originally Posted at The Wall Street Journal

It's no secret that Mozilla's Firefox Web browser is emerging as a potent competitor to Microsoft's Internet Explorer. What may not be fully appreciated is the impact that Firefox could have on Web-browsing habits -- and the number of searches people perform.

The most recent version of Firefox, released last June, makes it much easier for Web surfers to return to a site they've previously visited. They won't need to know the site's address -- the browser's address bar offers what's essentially an automated bookmarks list. This is likely to reduce the number of searches per person over time.

The feature is likely to become standard. Microsoft is adding something similar in its upcoming version of Internet Explorer. Google isn't sitting still. Three months after the new Firefox version was released, Google came out with its Chrome browser, which also has a similar feature.

Search will remain a vibrant market. Firefox's new feature won't help someone searching for the first time. And the importance to ad revenues of people getting to sites they already know is unclear.

That said, anything that could undermine the number of searches each Web user has to perform only adds uncertainty to the category's growth prospects. For Google, the dominant player, the implications can't be good.